With significant support from the NIH SBIR grant program (5R44HL53168), MC3 has successfully developed an artificial lung, called the BioLung(r). The BioLung(r) design is based on our patented, ultra-low pressure drop artificial lung technology. This device has undergone extensive bench top and animal testing during its development over the past 10 years, and will be manufactured in a commercial form ready to enter the U.S. and European regulatory process by August of 2004. Given the extensive and expensive regulatory process in the U.S., MC3 believes that it is essential to obtain an investigational device exemption (IDE) from the FDA in order to encourage the introduction of the BioLung(r) in the U.S. by way of a license agreement with a medical device distributor. As such, MC3 is proposing a continuation of a SBIR Phase II grant (5R44HL53168-03) to complete the necessary bench-top and animal studies, and quality systems evaluation of the manufacturing process to submit an IDE application. In addition, preparations for the Phase I clinical trial will be undertaken, including recruitment of centers, study protocol development, and medical reimbursement. The commercial potential for BioLung(r) is significant. The immediate market will be as a bridge to transplant. The long-term potential is as a bridge to recovery or as an alternative to transplant for end-stage lung disease. Currently, the number of patients awaiting lung transplantation exceeds 3,800. Of these patients, only about 25% will receive a transplant in the next year due to the scarcity of available donors, infectious complications, and because the patients are not physically strong enough to survive surgery. The BioLung(r) has the potential to increase the number of lung transplant recipients because it will provide a method to stabilize patients awaiting transplantation, and provide an option of support for post transplant, thereby, allowing the appropriate use of marginal organ donors. This type of outcome has been seen in the application of left ventricular assist devices in supporting patients for heart transplantation.